Copper: The metal that will build our future? – by Cole Latimer (Australian Mining – July 16, 2013)

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As we slowly come off the back of the mining boom, a number of questions are starting to be asked. Has the boom been played out, where to next, what will happen to iron ore? But what all are asking is what will be the metal of the future? What should we be digging that will provide the greatest return?

Perhaps the future is a metal which is a major part of humanity’s past – copper. Iron ore has been the metal that really drove Australia’s mining boom. It was the hero of the hour.

On the back of seemingly unending demand from Asia to fuel the growth of China we saw commodity prices skyrocket and essentially drag our nation out of the Global Financial Crisis.

Coal was also surging head, as both China and India required the energy needed to turn them into first world nations. As
a background to this gold prices also spiked, reaching never before seen heights.

But now the good times are over for these metals and the prices have steadily dropped, stabilising at more reasonable levels, or in some cases plummeting to just above cost levels.

Instead focus is turning to construction, and powering this new world that the mining boom has created, and in turn we are likely to see a steadily increasing demand for copper that, at current levels, the global industry is not able to fulfill.

Why copper?

IBISWorld explains that “many of the products manufactured from copper are associated with infrastructure development. For example, copper is used in electrical cabling, either insulated or uninsulated, for high-, medium- and low-voltage applications due to its electrical conductivity. Copper and its alloys are also extensively used in piping, valves and in decorative architectural applications (such as door furniture, building facades and roofing)”.

“Copper is also used in the manu­facture of industrial equipment, such as heat exchangers, pressure vessels and vats, due to its superior heat transfer capabilities and ability to withstand extreme environments.”

All major forms of transportation depend on copper such as the hulls of boats and ships to reduce drag and improving fuel consumption.

Cars and trucks rely on copper motors, wiring, radiators, and more; the average automobile contains two kilometres of copper and alloy cables, while the quantity of copper in cars can range from 20 kilograms for smaller cars to 45 kilograms for luxury and hybrid vehicles.

“Copper is critical to power supply, telecommunications and electronic devices, and is directly linked to economic development. For example, six years ago China consumed about 25 per cent of global copper, today it consumes more than 40 per cent,” BHP chairman Jac Nasser said.

Copper is one the major arms of BHP, and was initially developed in the 1980s through the acquisition of Utah International from GE for $2.4 billion, today it makes up about 15 per cent of BHP’s profit.

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